01 Oct Will a new job change my alimony?
Q. I’m divorced with a child who just started school. I get alimony but I’m thinking about getting a job. What will that do to my alimony?
A. Your question is one that you need to take to your attorney, or someone who knows more about your financial situation and your divorce settlement.
We can offer some broad advice, though.
In this case, it is most likely that the alimony you receive will not be affected, said Vicky Tomaro, president and founder of Tomaro Financial Group in Wall.
She said during the divorce process, the incomes of both spouses are analyzed.
“So if one spouse does not have any income, then it may be imputed to them for alimony calculations,” Tomaro said. “The imputed amount is based on their qualifications and/or prior work history.”
For example, she said, if a person is able-bodied and has a high school degree but has not worked in 10 years, they may be imputed a small amount, such as $20,000. That income would be used to help determine the spouse’s alimony requirement.
“In your case, if a job was obtained and annual income was $20,000 or less, then there would be no change to your alimony structure,” she said. “In fact, even if the annual income was greater than $20,000, it would have to be significantly higher to change the alimony structure.”
The relevant law reads that anytime there is a “substantial, permanent change of circumstances,” that a party is entitled to have his/her support obligation(s) (alimony/child support) reviewed and perhaps modified, said Ken White, an attorney with Shane and White in Edison.
Therefore, he said, the analysis of your situation starts with confirming whether there has been any substantial, permanent change of circumstance.
“Just securing a new job will not necessarily satisfy that threshold,” he said.
White said when your child support and alimony awards were set, some amount of annual income was probably imputed to you for the purpose of setting those numbers in accordance with the New Jersey Court Rules, Appendix IX-A, paragraph #12. Such imputed income would have likely been based on your past earning history or potential earnings as reported by the Department of Labor for someone in your former occupation.
Without knowing what annual income was imputed to you and what you anticipate earning in your new job, White said he can’t offer an opinion whether securing a new job will result in a substantial, permanent change of circumstance.
But following through on his example, he said, if at the time your support awards were set, annual income of $50,000 was imputed to you and your anticipated new job will provide annual income of $50,000 or less, you can comfortably predict that securing a new job will in no way impact your award of alimony as there has been no substantial, permanent change of circumstance.
Similarly, if your new, earned annual income in only 5 to 10 percent greater than the annual income that had been imputed to you, it will probably have no impact on your award of alimony as such an increase would generally not qualify as a substantial, permanent change of circumstance.
“The more substantial the increase in what your new, earned income is compared to the annual income that had been imputed to you, the more involved the analysis will have to be and the more exposure you may have to having both your alimony and child support awards modified,” White said.
He said you should note that your ex’s current annual income will impact a final analysis of the situation.
“If you ex’s annual income has substantially increased since your support awards were last set, you may be entitled to a larger child support award and it may offset any argument he has to seeking a modification of your alimony award,” White said.
At the same time, the court could decide to modify the support if the paying spouse has a job loss or a reduction in income.
It’s probably time for you to meet with a professional with experience in divorce issues — preferably someone who knows your personal situation.
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This story was first posted in October 2015.NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.